Settling FRAND Disputes: Is Mandatory Arbitration a Reasonable and Non-Discriminatory Alternative?

HOOVER IP² Working Paper Series No. 13003

Tilburg Law School Research Paper No. 023/2013

37 Pages Posted: 30 Oct 2013 Last revised: 6 Sep 2014

See all articles by Pierre Larouche

Pierre Larouche

Université de Montréal; Center on Regulation in Europe (CERRE)

Jorge Padilla

Compass Lexecon

Richard Taffet

Bingham McCutchen, LLP

Abstract

This paper reviews the recent proposal that SSOs amend their IPR policies to require SEP owners and willing licensees to resolve disputes over licensing terms, particularly FRAND royalty rates, using mandatory, binding baseball-style (or “final offer”) arbitration. We first consider the fundamental underlying premise of the arbitration proposal - namely, that there are systemic problems relating to FRAND-based standardization and that current disputes are not being efficiently addressed. We find that mandatory baseball arbitration is a solution in search of a problem, will not necessarily afford “better” outcomes, and is more likely to lead to decisions that undermine the standardization process.

Keywords: arbitration, courts, final-offer arbitration, FRAND royalties, IPRs, hold up, patent disputes, SEPs, SSOs, standardization

Suggested Citation

Larouche, Pierre and Padilla, Jorge and Taffet, Richard, Settling FRAND Disputes: Is Mandatory Arbitration a Reasonable and Non-Discriminatory Alternative?. HOOVER IP² Working Paper Series No. 13003, Tilburg Law School Research Paper No. 023/2013, Available at SSRN: https://ssrn.com/abstract=2346892 or http://dx.doi.org/10.2139/ssrn.2346892

Pierre Larouche (Contact Author)

Université de Montréal ( email )

Montreal, Quebec H3T 1B9
Canada

Center on Regulation in Europe (CERRE) ( email )

Rue de l'Industrie 42
Brussels, 1040
Belgium

Jorge Padilla

Compass Lexecon ( email )

Paseo de la Castellana 7
Madrid, 28046
Spain

Richard Taffet

Bingham McCutchen, LLP ( email )

Three Embarcadero Center
San Francisco, CA 94111-4067
United States

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